Filings Against Foreign Companies On The Rise

The number of foreign companies listed on U.S. stock exchanges has grown over the past few years. In 2002, there were over 1300 foreign registrants. With access to the U.S. capital markets, however, also comes the possibility of securities litigation brought by U.S. investors.
According to a study by PricewaterhouseCoopers, filings against foreign companies have been on the rise. In 2002, 22 foreign companies were names in securities class actions. This total is an increase of 47% over the 15 cases filed in 2001 and 29% higher than the previous record of 17 cases filed in 1998.
In a press release issued yesterday, PWC announced some additional findings, including:
1) Thus far in 2003, 13 foreign companies have been sued in securities class actions.
2) The average post-PSLRA settlement in cases against foreign companies is nearly $23 million.
3) More than 77% of the cases against foreign companies contained accounting allegations in 2002, and more than half of the 2003 cases contain accounting allegations.